This conference was an interesting alternative view for me. In the
words of one of the executives presenting, I am from the world of
internet companies, not from the world of telecommunications
companies. This conference is primarily aimed at mobile network
operators and handset manufacturers, and the companies who supply
them.

Even though my involvement in mobile stretches back over eight years,
I have always been building services to be made available over mobile
networks — ‘Over The Top’ services, or OTT, as the operators
refer to it — I have not been building networks or handsets. The
world of this conference is one I’ve only ever seen from a
distance. When you look at where the huge explosion in consumer use of
mobile has come from it’s very easy to be dismissive of
operators. I’ve tried not to think like that. I don’t understand their
world: I’m sure there’s much I’ve missed.

My goal for this conference was to understand the world of carriers
and to no longer ever worry about being dismissive. I failed.

At the beginning of each session a stinger video was played. This
video was a potted history of mobile communications, intended to
inspire. It finished with a list of demands:

Harmonised spectrum; and

A positive regulatory environment.

I had to look up what was meant by harmonised spectrum. I’ll come back
to that.

The most interesting session for me was one titled “Social Media:
Making the Networks Pay.” It was in this session that the executive
from a US network operator divided the world into ‘telecommunications
companies’ and ‘internet companies.’ His point was that on one hand
the ‘internet companies’ (meaning companies building the internet and
services available on it) have been really good at agility but really
bad at standardisation. While on the other hand, ‘telecommunications
companies’ (network operators, handset manufacturers and their
suppliers) have been really bad at agility but really good at
standardisation. From those assertions he went on to say that internet
companies need to expect to cede more ground to telecommunications
companies, and expect them to be more active participants in the
services they wish to offer.

But are those statements accurate?

I think we can all agree that, largely, the operators are not agile.

Harmonising spectrum is the telecommunications companies agreeing to
use the same bands for the same purposes across different
countries. Historically, they haven’t done this and as a result we
have had quad-band 3G phones. Phones with four radios to be sure they
work in at least the majority of countries. That’s not very
standard. We’ve also had the debacle of the network standards between
GSM and 3G: they were all subtly different. It’s only now with 4G LTE
that operators are agreeing on a long-term single network
standard. None of that sounds very standard to me.

Internet companies are certainly agile. But are they really bad at
standardisation? Over thirty years ago all-IP networks became the
defacto standard. But that’s only one step up from the logical link
layer. There’s also standardisation of TCP and UDP and even at the
application layer with HTTP. In fact, when it comes to network
standards the internet companies have been amazingly standard, for a
very long time. These standards are so rich that we’re still exploring
the capabilities of an all-HTTP inter-connected web. The network
operators are also moving towards all-IP networks: adopting the
standard of the internet companies.

Hmmm… It looks instead that the telecommunication companies are
bad at agility and bad at standardisation while the internet companies
are good at agility and good at standardisation.

How did this happen? The answer came from another participant at the
same session, and references the other demand of the conference
organisers: ‘a positive regulatory environment.’ Building a
country-wide mobile network is hard. Dealing with multiple levels of
government across different regions and states is also hard. These
two things eat up pretty much all of the attention and effort of your
average network operator. They simply don’t have the capacity left to
innovate.

They are so far from innovating that they don’t even know what they
have to work with. The CEO of a major operator was asked in a keynote
session what he thought their biggest asset was. He stated that it was
the network. That’s mistaken. The network is simply the price of
entry: without a network you’re not a network operator. The real key
asset is the billing relationship with their customers. This is
something that operators have sat on and locked away. Who else
remembers trying to offer SMS applications in Australia in the early
2000s?

Mobile phones came too late to replace credit cards, but the debit
card should simply never have happened. We should be using our mobile
phones to pay for things. There is a communication standard
(RCS) coming from telecommunications companies. This is
intended to replace the existing mish-mash of communications protocols
(SMS, IM, SIP, XMPP, etc.) and to open up access to operator
value-added services. I simply do not believe that the operators will
allow it to happen. I spoke with an implementor of this standard. He
explained that it does include the ability to bill a customer, using
the operator’s billing systems. Just like in-app purchase on the
iPhone. But he was pretty sceptical that operators would make it as
easy for developers to use as Apple has.

The executive who complained about the standardisation of internet
companies was also the only person I heard willing to give voice to
the deep fear of all telecommunications companies: they are doomed to
become just a dumb pipe. Unfortunately, after spending time in their
world, that’s the only outcome I expect to see.

In 15 to 20 years time it will make as much sense to consider an
operator participating in the consumer value proposition as it does
for an electricity utility now. As I’ve said before, they’ve
done this to themselves: do not mourn their passing.